7 App Business Moves Your Competition Is Doing Better Than You Are (Guilty of #6)

Over the last six months, I've had the privilege to work with a whole range of app companies, app developers, and marketers. They range from indie beginners to full blown, $30M venture funded app studios. I've worked with people making $10/month and I've worked with people making $1,200,000/month. In the gaming world, I get to see how so many people are working through their own paths and trying to make something stick. It's been both enlightening and frustrating to see how much low hanging fruit goes unpicked, especially by the smaller guys (YOU!).

To be fair, it's hard to do everything and still follow the app flipping mentality, producing huge amounts of assets as quickly as possible. They're diametric. But, at some point, each of you is going to wonder  what the big dogs are doing. I'm not talking about the guys who skyrocket to the top of the charts and make a ton of cash overnight – I'm talking about the people I've met who can, without any hesitation, take $1 and turn it into $2. Every time. All day. They're not necessarily at the top of the charts (because they can't perform that alchemy on any old user), but they certainly know what they're doing.

So, I figured I would pass along some of these insights. This is from REAL experience working with over 200 developers. The list represents the most common differentiators between the good and the great in the mobile world.  I also implore you to checkout the Mobile App Development Guide for some extra tips and sources you need to know about.

1. Hiring native speakers to do localization.

localizationI'm the first to admit that I've been known to use Google Translate. Sometimes it even works (I can speak un poquito Español) which often leads to me getting ahead of myself and thinking I can “eyeball” Russian as well. Not even close. даже близко.

What the top companies do is to recruit native speakers to translate the descriptions for them. Why? Not only because of grammar and all that, but because there can be subtleties that only natives know about. Specific words, references or phrases.

Similarly, they can help customize screenshots to show images that will resonate better with an audience. I have an app that uses prizes and showed it to a Chinese publisher – her immediate reaction was “Oh wow, if you showed XYZ images instead of ABC, this would be huge in China.” She then proceeded to show me exactly why. I was blown away. Btw how is QQ so massive in China?

This isn't as hard as you might think. Start with friends and family, move to social networks. Check outsourcing websites. Start slow. Not sure if this is a good ROI or not? A good rule of thumb is to use this technique once you've determined you have a winning app as opposed to trying to turn a loser into a winner.

Typically that's the best use of your time and money anyway.

2. Spending more time in the analytics than in the revenue report.

analytics

This is probably the most blatant difference between beginners and veterans. Of course, it's different when you're making money or have money to spend, but it's still important to point out. When you walk into a major gaming studio, there tend to be about 2-3x eyeballs on the analytics than on the revenue reports come in. Why? Because of this basic principle that most people don't realize:

Analytics are the key to scaling in business.

Think about that – how many companies do you know that can scale broken products? Similarly, imagine if every app you re-skinned or published had a detailed analysis every day and had tons of tests lined up for 6 months? By the end of that 6 months, every app that was shipped would probably make you 50% more money simply because the analytics pointed out problems.

Looking at revenue first is of the mentality of “publish first, cross fingers, see revenue to determine which was good” whereas looking at the analytics is more about “determine winning strategy, tweak, repeat.”

It's not easy, it's very difficult to outsource, and can often lead to dead ends. But that doesn't change the fact that almost every  app company that has scaled, benefits from this.

3. Networking

networking

This is, hands down, the biggest ROI hack I've ever found in business. Networking has such a lame connotation – the image of exchanging business cards and talking about goals and shit like that. Yeah right.

Networking is when you connect with someone who is on a completely different level than you are and you want to know why. I've met guys who can buy over $7M/mo in traffic and they don't blink an eye. They have given me more information in 20 minutes than I would have gotten researching blogs for 2 months. I've sat down with monetization gurus who can tell me everything that I'm doing wrong in 5 minutes. I've met hedge fund managers who show me how to turn $500,000 into $5M in two years just by investing it correctly.

The sad fact is that most people don't network very much because they're too shy or they don't know how to. When they do, they call up people just like themselves and end up talking about the same shit they talk about on Facebook.

I can assure you that by talking to people who are way further down the path than you are will change everything for you.

If you want a place to start, go to Clarity.fm – seriously, put aside $150 a month to talk to incredibly smart people. You WILL NOT be disappointed.

4. Setting up proprietary ad deals.

ecpm

I'm going to write about this soon, but basically there is an enormous amount of money that goes unspent each month in the mobile ad network community. Sometimes it's because of misaligned demographics, but mostly it's because ad networks simply can't satisfy the appetite.

I was turned onto this model last October when someone showed me that he dealt with 3 advertisers who performed incredibly well for his apps, then negotiated crazy high CPI and eCPM rates. Chartboost offers something similar to this with Direct Deals, but people do this kind of stuff all the time outside of that framework.

I am certain that there are  people out there reading this blog who get more downloads a day than I do, but I can often still make more money. In fact, I went a solid few months where I was pulling in $20 eCPM as a minimum on most of my apps with this strategy (late 2013-2014, by the way, not 2012 times) which drove revenue that only would have happened with 5x the traffic previously. On an average day I would pull in about $33 eCPM and it would be like that for every app I made after.

This is happening but requires some creativity and hustle. You'd be surprised at how much of a difference this can make.

5. Dialing In Backfill Campaigns

backfill

Any idea what the fill rate is on your ad networks? Even more importantly, any idea what the geographic fill rates look like?

I hate to break it to you, but they are WAY worse than you think, even with the big networks. I'm talking like 60% in many cases. Even if you're mediating, it can be abysmal.

What a lot of people don't do is capitalize on this with house ads/backfill. These are ads that you create yourself and serve when the ad networks can't fill the regular inventory. Most people simply create a cross promo to one of their own games (slow clap).

What they DON'T do is manually create a freakishly powerful affiliate network inventory that usually outperforms the regular ad network fill ads anyway. Here's a quick an dirty step by step:

1. Your MoPub banner has a 83% fill rate in the USA
2. You create a backfill inventory ad campaign that will show when no other network can fill that spot
3. You go to something like www.offervault.com and find an offer that you think will perform the best for your app (hint: look at historical performance to get an idea)
4. You create/download creative and get an affiliate link for that app
5. Your backfill ads now actually point to an app that will pay out a $3 CPI instead of being empty 17% of the time
6. Get a beer

This is a simple, easy to do strategy that can have a big impact on your ads.

6. Realizing that not all audiences behave the same (No, I don't want to download Candy Crush in my photo app).

easter

As much as I wish the “market” could determine the best ad to show to the right person, the truth is that most people get awful targeting. A lot of this is because of Apple's restrictions, but a lot is because eCPM calcuations are heavily skewed towards bid size. In other words, the top bidding app usually gets shown because the price will almost always trump anything else.

Something I notice successful app companies doing is realizing that they cannot just show the market bid ads to their audience. They need to control it, even if it means less impressions and lower eCPM – they want Lifetime Value (LTV) over everything. The idea of advertising Big Fish Casino in a Food and Cooking app is something that a beginner might do (because, hey, let Applovin's algorithm do the work, right?), but a more advanced marketer would never let happen.

As you move into niche games and out of games entirely, realize that you need to think about your monetization strategy accordingly. If there are few ads that convert well for Weather apps….maybe ads aren't your strategy anymore, or you have to find a very specific type of advertisement that works in those types of apps. This should be a BIG decision, not just something that everyone else is doing.  

7. They know when to cut their losses.

cut_losses

Unfortunately, this is in the minority of companies in San Francisco. Led by visionaries instead of CFOs, businesses tend to believe in the dream so much that they blind themselves to the fact that certain parts of the business are just sucking cash. The companies that I have seen succeed do this constantly, referred to as “pivoting,” but on a micro level. 4 months of development on a chat function with no timeline in sight? Scrap it and eat the $30k investment. Re-focus on the apps that are actually profitable.

This can be a difficult trade-off to make. Certain ideas require a period of zero profit to explode. But most don't.

Remember, 4 singles is the same as a home run.

One of the most common conversations I have with people is trying to politely say that they're wasting their time and money on so many expesenses. Why do you have three VAs? Why are you using AppFigures (paid) and not AppAnnie (free)? Why are you spending $10,000 a year trying to turn that big game into a top grossing game when you have 7 other apps that make $2,000/mo and the big one makes you $200?

Like I said, it's not easy, but the lean startup is setup for success. If you haven't already, sign up for my newsletter to hear more insider info like this.

It's always amazing to see how differently app businesses are run. Did I miss anything?

Leave me a comment tell me one business tactic you are doing to grow your company.

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COMMENTS

  • Responsive Miracle April 8, 2014

    Thanks for sharing your advices. I like #2.

  • Samuel April 8, 2014

    Carter,

    I am guilty for using Google Translator myself for #1 just out sheer laziness. But you are right though. There are some subtleties in language and the culture of that language only a native translator can convey over into your metadata.

    My biggest struggles have been ASO. Understanding which keywords I can rank for that will give me good visibility, traffic and allow me to climb the charts for that keyword. Also testing and knowing when to ditch certain keywords that don’t perform well.

    Thanks for sharing your insight. #3 and #5 are golden!

  • Carter Thomas Carter Thomas April 8, 2014

    @Samuel – yeah, it can make a big difference. I hire a full team of 15 people to do localizations for my big apps. It has paid for itself many times over. ASO is a tricky one, I’ll be writing more about it soon. Thanks for commenting!

  • Gabriel April 8, 2014

    Thanks Carter for the share,

    I agree with all points. Especially with networking. It’s the best way to find great info quickly and rethink your strategy.

    I myself have a few photo apps: i turned off all ads recently because i couldnt serve ads that related to my audience. I can get what i believe is a lot of impressions but ad networds refuse making direct deals because i dont have games (mopub, appflood, chartboost). I know a few guys making photo apps like me and we’re all struggling with ads. I mean we’ve got a valuable user base but can’t monetize through… Anyway we’ll find a way 🙂

    Gab

  • Jozef April 8, 2014

    Thanks Carter for the post!
    #5 is great! What about using 2-3 ad networks in a priority list – if the first one doesn’t show any ads, I will use the second, then third network. Have you tried that?

  • Carter Thomas Carter Thomas April 8, 2014

    @Gabriel – that is definitely a common problem with photography apps. I see a the best success with a PRO version upsell in the app and selling functionality. Ads just aren’t built for photography apps right now. You can make a pile of money on IAP and paid downloads though. One SDK to check out is Iddiction’s new Xplode cross promo tool. This will help with downloads but you still need to figure out a way to monetize. Try doing a few updates with new functions to your apps, then turn on Xplode.

    @Jozef – Yes, I do that as well. Important to remember that ad networks are usually serving up 90% of the same inventory – the same people pay everyone’s bills. This means your eCPM won’t be drastically different unless there is a clear match of game to advertiser. Also, with priority list, you’d be amazed at how much that changes by geographic area, something that isn’t really discussed.

    Thanks for your comments!

  • Kevin April 8, 2014

    3 and 4 seem related. Through networking you could probably generate some leads on private ad deals. Would you be able to expand more at some point on how you structure private ad deals? Cost and how much traffic is required are all variables that I would not even know where to begin

  • Carter Thomas Carter Thomas April 8, 2014

    @Kevin – yes of course, though that would probably be better for a post. I’ll start working on something and get it up ASAP. Thanks for your comment!

  • Chris W April 9, 2014

    Wow dude, really appreciate you taking the time to putting this blog post together. I only have a single app in the store so far, but I’ll keep these strategies in mind and continue to listen to what you have to say. The first $150 I spend on Clarity.fm shall go towards a chat with Mr.Thomas.

  • Oliver Saylor April 9, 2014

    Great post man, much appreciated. Any chance you’ll be elaborating on 2 in a separate post?

  • Carter Thomas Carter Thomas April 9, 2014

    @Chris – right on man! Good luck to you. Look forward to talking.

    @Oliver – yeah, I’ll definitely get into the analytics stuff. Probably take a few posts haha but it’s important so I’ll get on it ASAP.

  • George April 9, 2014

    Hi Carter,

    Thanks for the info and the inspiration!

    I cought the appreneur bug a couple of months ago and I’m happy to report that my first game is currently under development!
    I’d like to ask a few questions:
    1) What ad networks do you reconmend for a global audience? In this post you mention mopub, are they paying more that revmob, chartboost etc? (you mentioned these networks in some of your older posts)
    2) I have an idea for a company name, but I think I should wait until I see money coming in, before I go on and create a LLC. Is it possible to launch the app under the future company name instead of my own name?

  • Carter Thomas Carter Thomas April 9, 2014

    @George – Awesome news and welcome to the party. Congrats on your first game! Some answers:

    1. Super tough question. Mopub is a DSP (demand side platform) which means it is an exchange of independent ad networks. That typically means it will have a high fill rate but also a low ecpm. I only really use MoPub for banners, but you could mediate Chartboost and others in there if you wanted to do full screens. Typically the best thing to do is to create some sort of mediation for your apps – you can have a developer build this (should be pretty easy) or you can ask around on Facebook to see if anyone else has something you could use.

    More importantly, realize that almost no ad network is a one-stop solution. What does well in USA sucks in Korea. What kills it in China is nothing in Canada. As you find out what your traffic looks like, you can begin to pinpoint which networks to use for which segments. Though this may seem overwhelming, it’s pretty straightforward once you get into it.

    On a 10,000 foot view, rule of thumb is that full screens make the most money (and annoy people the most), banners are secondary money places, and knowing where to show ads makes a difference. Game networks (Chartboost, Playhaven) work best for games, DSP (AdMob, Mopub) work better for non-games.

    2. No. You’ll have to register as an individual with Apple first. When you decide to create the LLC, you can roll your individual account into the LLC seamlessly if you want to.

    Good luck!

  • George April 10, 2014

    I’ve asked my developer to install SDKs for 9 ad networks in order to be able to test.

    Can you explain how you can you pinpoint which networks to use for which segment? I think if you use smaato, it does this automatically.

    If you create a backfill inventory ad campaign on mopub, will they keep a comission of that, or do you get to keep 100% of what you make?

    many thanks, and apologies for the newbie questions 🙂

  • Carter Thomas Carter Thomas April 11, 2014

    @George – no worries man. That’s a great test to do with developers to find out both their developer acumen and also to find out how well you work together.

    There is no direct way to pinpoint networks to segments. Within each network, you can qualify traffic based on geo, demographic information, hardware, etc, but from a network standpoint, it’s a lot harder to gauge. Advertisers come and go and the market is constantly changing. Right now it’s mostly games vs non-games. That will eventually change, but it takes time.

    Smaato is the same as MoPub – they’re a DSP. You can target within Smaato but you’ll only be targeting their own marketplace traffic. You need to do the targeting for the ad networks you’re mediating on their own platforms.

    Creating backfill will be zero commission. They make money on their own marketplace within their mediation. Like if they can be AdMob and serve their ads, they keep whatever they keep as an independent ad network. Backfill is totally controlled by you.

    Hope that helps and good luck!

    Carter

  • Shawn April 11, 2014

    Hi Carter
    Great post and I’ve learned quite a bit in this one post alone!
    Curious to know what you meant by the studying and analysis of analytics.
    Are you looking for retention rate, session length, geographical demographics,sessions per week or all of them?Im guessing its how your user generally behaves and interacts with your app? and say for example if you know they spend 1-3 minutes per session on your game, what can you do/should you do about it? or how can you make your next reskin better?

    Also you were talking about dialling in backfills… what exactly is this ( it sounds like a foreign language) and can we do this ourselves or we need a developer to implement this in our app?
    many thanks!

  • Carter Thomas Carter Thomas April 11, 2014

    @Shawn – With analytics, what I mean is that you need to identify why things are happening. This may be why people are not retaining in your app, why they’re not spending money, or anything in between. It can also be to identify why people are doing GOOD things like spending tons of money so you can re-create that. Also, it helps when you start buying traffic because you can see which channels and demographics are your best performers.

    Backfills are what happens when an ad network cannot serve an advertisement. It just doesn’t have the inventory. When this happens, a backfill campaign “back fills” that empty inventory. Yes you can do this yourself as I explain above. If you use a DSP like MoPub you should be able to read more about it in their Help section.

    Good luck!

  • Patrick April 12, 2014

    Hi, nice post. I’m most interested in #4. Do you set these deals up then channel all their advertisers ads through chartboost direct deals? (and turn off the other ads)

    And would like to hear more about how you find and negotiate deals with the devs that pay these high rates.

  • Carter Thomas Carter Thomas April 12, 2014

    @Patrick – that’s one way to do it. Sometimes it’s through other networks, but the idea is the same. Actually I had more luck going to ad networks themselves instead of advertisers. This is not the normal way to do it and requires a little bit of relationship building, but it worked well.

    I’ll explain a lot more about this in a later post as it is a massive topic. Stay tuned and thank you for commenting!

  • Tiffany April 14, 2014

    I hope you write the eCPM blog soon. You encouraged me to rethink my themes and I launched an app pulling in over $100 a day. I’ve noticed spikes in the eCPM on certain ad publishers and I’d like to understand more about what I can do to manipulate it.

    Also are you platform agnostic (Droid and iOS) or do you typically only work with iOS? Sorry if this should be obvious from reading your posts.

    Thanks,
    Tiffany

  • Carter Thomas Carter Thomas April 14, 2014

    @Tiffany – I work on iOS, Android, and Amazon mostly. Congrats on the $100 a day! What exactly do you want to know about eCPM? Like the scripts I use when talking to advertisers/networks? It’s all about targeting and leveraging a good deal.

  • Tiffany April 14, 2014

    Yeah even at $100 a day I don’t have enough bootups to do Direct Deals via CBoost. I’m at 15k with the min required at 20k. What other avenues do you use to contact the advertisers direct? Or do you literally research the company/advertiser and contact them via their website rather than through a network like Cboost, Revmob, Admob, etc….

  • Tiffany April 14, 2014

    Just read your other comment from this post: http://www.bluecloudsolutions.com/blog/mobile-app-monetization-125-ecpm/

    —“It comes down to targeting. Are you just installing the SDK and letting a network do all the work to allocate your traffic? Or are you optimizing, targeting, and creating your own deals with advertisers? My most recent posts talks about this. Huge eCPMs are not crazy if you connect the dots the right way.”—-

    Ok, so that’s what I need to better understand. You personally wouldn’t just install a Revmob SDK and let it dictate ads. I’d like to do this-> optimizing, targeting, and creating your own deals with advertisers. Where do I start? How do I allocate my own traffic and dictate what ads get shown?

  • Serg April 15, 2014

    Hey guys, and hello Carter. Much like Tiffany, I would like to know where to start seeking direct deals, I definitely have traffic to offer.

  • Tiffany April 24, 2014

    I looked at the Gangnam post and revised CPI campaigns according to that. Seems to have boosted the eCPM on Cboost. Still need to do more research on the others.

  • Robert October 9, 2014

    We have over 30 apps in both stores, but what is funny is that you can always optimize and you always have to do something.
    We just started adding Analytics into my apps after your post 🙂

    I use(d) Google Translator too, sucks, but I didn’t think that would make such a big difference.

  • Robert October 9, 2014

    @Serg, I am in this group on Linkedin and I see a lot of people buying/selling mobile ads. I never used it before, but maybe it will help you.
    https://www.linkedin.com/groups?home=&gid=5154338&trk=anet_ug_hm
    Group name: Buying & Selling Mobile Traffic( CPM, CPC, CPA, CPS,CPI, CPD)

  • Joe Wilson January 1, 2015

    Hey Carter,
    I love to get your take on number 2 and which tools you use for analytics, and some of the triggers/indicators you watch for as it pertains to your business.

    Me personally I tie my analytics closely with my localization efforts to better boost sales in countries where my apps are doing well.

    Love the post!
    Happy New Year!
    Thanks
    Joe

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